Diageo PLCtoday said it plans to increase its stake in Nairobi-based East African Breweries PLC (EABL) via its subsidiary Diageo Kenya Ltd. The company already owns 50.03% of the issued share capital of EABL and wants to raise it to up to 65% through a partial tender offer.
Once all the necessary approvals have been obtained from the Capital Markets Authority, the tender offer will open on 30th January 2023 and will be closed on March 10, 2023.
The current price level seems attractive to Diageo because the share price has fallen by more than one third since the beginning of the pandemic on February 20, 2020 despite rising local consumption. Last year, Diageo already upped its stake in Tanzania’s second largest brewery Serengeti Breweries (SBL). (inside.beer, 31.1.2020)
Diageo is offering to buy 118.4 million shares in EABL at KES 192 (USD 1.59) each, which gives investors a 39% premium over the market price of KES 138 on the Nairobi Securities Exchange on Thursday 13th October 2022. Diageo said, it will keep the company listed and does not intend to take over the entire company should it attain its desired level of ownership.
EABL is a public limited company incorporated under the laws of Kenya and is listed on the Main Investment Market Segment of the Nairobi Securities Exchange.
EABL was founded in1922 in Nairobi, Kenya. In 1946 the company established Uganda Breweries, a subsidiary in Port Bell, Kampala in Uganda.
In 1990 the Irish brewer Guinness bought a minority stake in EABL. In 1997, Guinness plc merged with Grand Metropolitan to form the multinational alcoholic-drinks producer Diageo plc, based in London, UK. Since 2000 EABL is majority controlled by Diageo. In October 2010, EABL acquired 51% of the issued share capital of Tanzania’s second largest beer company Serengeti Breweries Limited (SBL) based in Dar Es Salaam.
In May 2022, EABL announced to build a new KES 1.2 billion (USD 8.6 million) microbrewery next to the brewery in Ruaraka, Kenya, as a brand home for the company’s flagship beer, Tusker, as an innovation hub for alcoholic and non-alcoholic beverages and as a training center for upcoming brewers and leading production staff in Kenya, East Africa, and the entire Diageo. (inside.beer, 30.5.2022)